BUCHAREST, Romania — Remembered as a brutal sadist by inmates who managed to survive the prisons he once ran, Alexandru Visinescu bubbles with violent fury. “Get away from my door, or do you want me to get a stick and beat you?” the 88-year-old former prison commander screamed recently when a reporter called at his fourth floor apartment in the center of this capital city.

Like other onetime servants of the old Communist government, Mr. Visinescu — now a frail retiree with a hunched back — does not like being disturbed. Until recently, he was not. He was left alone with a generous pension and a comfortable apartment, surrounded by black-and-white photographs of his fit, youthful self in uniform. He passed his time with leisurely strolls in a nearby park.

His peace ended in early September, when prosecutors in Bucharest announced that Mr. Visinescu would be put on trial over his role in Communist-era abuses, the first case of its kind since Romania toppled and executed the dictator Nicolae Ceausescu in December 1989.

The case has opened a flood of news media coverage here and raised hopes, however tentative, among victims and their advocates that Romania may finally be following most of its neighbors in Central and Eastern Europe in shaking off a national amnesia about its brutal past and re-examining a culture of impunity that has fed rampant corruption and constrained the country’s progress despite its entry into the European Union in 2007.

In the eyes of many here, the downfall and execution of Mr. Ceausescu merely removed the leader of the old Communist Bloc’s most intrusive dictatorship, leaving the system beneath largely intact. That continuity between the Communist and post-Communist elites helps explain why resistance to a serious reckoning with past crimes has been particularly strong in Romania, where there is still widespread nostalgia for the Communist era.

“We are coming from very deep and dirty waters,” said Laura Stefan of the Expert Forum, a Bucharest group that campaigns to strengthen the rule of law. “Corruption has a big link to the fact that we haven’t talked about our past,” she said. She welcomed the prosecution of Mr. Visinescu as an encouraging sign, noting that “to even think that these people are guilty and should pay is very new.”

A former work camp commander, Ion Ficior, is also under investigation and may face charges.

Still, Ms. Stefan doubts that the authorities are “really serious” about putting Mr. Visinescu and others in jail. “I am not optimistic at all,” she said.

Fueling those doubts is the fact that Mr. Visinescu has been charged with genocide, which usually applies only to efforts to liquidate, in part or entirely, a religious or ethnic group, not to political repression. And the crimes he is said to have committed stretch back more than half a century, predating the Ceausescu dictatorship, which lasted from 1965 to 1989 and remains a far more politically delicate period because so many members of Romania’s Communist establishment under Ceausescu maintained positions of power even after the fall of the old regime.

The difficulty of making a genocide charge stand up in a Romanian court — and then against any legal challenge at the European Court of Human Rights in Strasbourg, France — has raised concerns among those who have long pushed for justice that the case could prove to be yet another false start in the country’s fitful efforts to come to terms with its past.

“They have charged him with genocide just so they can close this file without a result,” said Dan Voinea, a Romanian criminology professor who served as the prosecutor in the hasty Dec. 25, 1989, show trial of Mr. Ceausescu and his wife, Elena.

Romania’s political and economic elites, Mr. Voinea said, are still dominated by former Communists, their relatives and allies “who want to make sure that the crimes of Communism are never unveiled and never prosecuted in a serious way.”

Indeed, critics of the government say the prosecution of Mr. Visinescu was undertaken only because the prosecutor received a detailed file from the Institute for the Investigation of Communist Crimes, a semi-government body in Bucharest that researches cold cases.

Romania under Mr. Ceausescu was the most authoritarian, Stalinist government in Eastern Europe, a paranoid nightmare in which one in 30 people worked as informers for the ruthless security agency, the Securitate. Mr. Ceausescu’s repression of dissent was so complete that Romanians were forbidden to own typewriters without a police permit.

The General Prosecutor’s office in Bucharest, headed by a former soldier who took part in the shooting of protesters, or so-called terrorists, during the 1989 uprising against Mr. Ceausescu, declined to discuss Mr. Visinescu’s case. It has not explained why it chose to prosecute him with genocide, a crime that will be very hard to prove but may offer a way around a statute of limitations on lesser offenses.

Still, for many here, Mr. Visinescu’s prosecution is significant for bringing a measure of accountability for the first time to a penal system that, according to researchers at the institute in Bucharest, not only subjected prisoners to physical and psychological abuse but, at times, also sought the extermination of the government’s opponents.

That was especially the case at Ramnicu Sarat prison, 95 miles northeast of Bucharest, which was reserved for political offenders singled out for harsh treatment. Mr. Visinescu commanded the prison from 1956 until 1963.

“Evil now has a face in Romania,” said Vladimir Tismaneanu, a University of Maryland professor who headed a 2006 commission set up by the Romanian government to examine Communist-era crimes in general. “It is one thing to have abstract evil, but the public needs to see an individual.”

Aurora Dumitrescu, who was arrested in 1951 at the age of 16 and sent to a women’s prison run by Mr. Visinescu in the town of Mislea, remembers him as “a beast.” She said he delighted in sending inmates to the “black chamber,” a dank, windowless concrete room used for beatings and psychological torture. “For him we were all just animals,” she said.

For his part, Mr. Visinescu, who is accused of direct involvement in six deaths, told the Romanian news media that he could not be held responsible for decisions made by superiors.

Insisting that he had “never killed anything, including a chicken,” Mr. Visinescu told Romanian television that he had merely been carrying out prison rules dictated by the General Directorate of Penitentiaries.

“Yes, people died,” he said. “But people died in other places, too. They died here, there and everywhere. The food and other conditions were all in accordance with the program. If I hadn’t followed the program I would have been thrown out. Then what would I have done?”

Even some of his victims have some sympathy for his argument and wonder why only a relatively minor figure from so long ago is being pursued.

“The chiefs are much more guilty than he is — it was the system,” said Valentin Cristea, 83, the only living survivor among the political prisoners sent to Ramnicu Sarat prison.

Mr. Cristea, a retired electrical engineer who once designed listening devices for Romania’s Interior Ministry, was first jailed in 1956, accused of belonging to a tiny anti-Communist group headed by his aunt and her husband. He spent six years in various jails, including Ramnicu Sarat.

Mr. Cristea said he was never beaten by Mr. Visinescu but, while held in isolation like all other inmates, heard the screams of prisoners who fell victim to the commander’s violent rages. While insisting he has no thirst for revenge, Mr. Cristea says he thinks it is important that the actions of Mr. Visinescu and his chiefs be remembered.

“There should be big photographs of these people in every town so that people can know they existed and remember those terrible times,” he said.

Far from that, with the exception of people directly implicated in the killing of unarmed civilians during the murky 1989 uprising, including the defense minister at the time, no significant figures in the organs of Communist power have been put on trial. Efforts to bar former officials from office have all come to nothing.

When Mr. Tismaneanu’s commission reported in 2006 that more than two million people were killed or persecuted by Communist authorities, President Traian Basescu endorsed the findings and said it was time to judge past crimes so as to lift “the burden of an uncured illness.”

Members of Parliament booed and jeered as he spoke. No prosecutions followed.

“They changed the name of the system and its outward features, but its nature remained the same,” said Anca Cernea, who runs a foundation dedicated to the rule of law and the memory of political prisoners. “The people who are ruling now all come from this system, so they don’t want to punish its crimes. They all say let’s forget and move on.”

Mr. Visinescu, she added, “is definitely a monster, but he is not the only one. They have thrown him to the lions to save themselves. He committed crimes but not genocide.”

Trying to Widen His Appeal, Cameron Accelerates Aid to Help Britons Buy Homes

By STEVEN ERLANGERIHT

LONDON — Attempting to demonstrate that Britain’s Conservatives are on the side of working people, Prime Minister David Cameron on Sunday announced the acceleration of a program to increase home purchases.

Mr. Cameron said on the eve of his party conference that he would immediately begin the second phase of a “Help to Buy” program scheduled for January that provided government guarantees to banks to allow home buyers to receive mortgages with only a 5 percent down payment on properties costing up to £600,000, or about $962,000.

The government will provide £12 billion, or $19 billion, to guarantee 15 percent of a mortgage, allowing lenders to provide up to 95 percent of mortgages at reduced risk. Participants will not be allowed to use the plan to buy a second property.

Mr. Cameron announced the change in interviews with right-leaning newspapers like The Sunday Telegraph and The Sun on Sunday. He told The Sun that he wanted to put young people on the housing ladder. “The need is now,” he said. “What concerns me is that you can’t buy a house or a flat even if you are doing O.K., you have got decent job prospects and good earnings.”

Critics say the plan may accelerate a new housing bubble, especially in London. The average cost of a house in London surged by 10 percent between July and September, compared with the third quarter of 2012, reaching £331,338, or $531,000, British bank and mortgage provider Nationwide said on Friday. The average price of a house in London, the bank said, is now 8 percent higher than in 2007, just before the global financial crisis. Across Britain, the average price of a home is £170,918, about $274,000, up 4.3 percent compared with the third quarter of 2012.

Since the mortgage guarantee part of the plan was announced in March, the rise in prices, indicating a brisk market, has raised questions about whether the plan is needed at all. Britain’s business minister, Vince Cable, a Liberal Democrat, has expressed his concerns about the program, saying there was a “danger of getting into another housing bubble.” And the chancellor of the Exchequer, George Osborne, last week asked the Bank of England to keep a closer eye on the impact of “Help to Buy.”

Ed Balls, the Labour Party’s shadow chancellor, responded on Sunday to the Cameron announcement by saying that the government should instead invest in building more affordable homes, denouncing what he said was the lowest rate of house-building since the 1920s. That was the best way for first-time buyers to get on the housing ladder, Mr. Balls said in a statement.

Mr. Cameron has also said that he would introduce tax breaks for married couples of low and medium income. These could cover about one-third of married couples and civil partnerships and save them £200 ($320) a year. He said his coalition partners, the Liberal Democrats, had opposed the idea.

In his party conference last week, Labour’s leader, Ed Miliband, took a more populist stand, calling for slightly higher corporate taxes and a freeze on energy prices, which the Conservatives likened to old-fashioned price controls. Mr. Cameron told The Telegraph that such policies were “nuts.”

Mr. Cameron’s aides were also at pains to deny reports in a new book that the prime minister and his wife, Samantha, disliked Larry, a cat who also inhabits 10 Downing Street and has high favorability ratings. Larry, 6, was adopted from a Battersea shelter in 2011 to combat a rat infestation behind the famous black door.

Mr. Cameron is trying to appeal to the right — to attract voters who favor the anti-Europe, anti-immigrant United Kingdom Independent Party — and to the center, to win back those who voted for his coalition partners, the Liberal Democrats. Elections are expected by May 2015.

The European Central Bank wants to impose rigid tests on financial companies in the euro zone before it assumes its new supervisory role. But even before the tests are set to begin, the ECB is already tangling with policymakers.

Jörg Asmussen is introduced as someone who "was in the eye of the storm." After five years of the financial crisis, Asmussen, who is bald and walks with a slight stoop, is taking stock before the attendees of a conference at a Frankfurt hotel.

But Asmussen, a former state secretary in the German Finance Ministry, doesn't spend much time dwelling on the past. Today he is a member of the executive board of the European Central Bank (ECB), which is currently launching a large-scale project to finally clear away the toxic assets left over from the crisis and build a new firewall, the European banking union. The first part consists of a balance sheet test. The ECB plans to put 130 major banks to the acid test before it assumes regulatory supervision of the institutions in the fall of 2014.

"This test is not a threat," Asmussen tells his audience. "But after two failed stress tests, this is the last opportunity to reestablish confidence in the European banking system."

A comparison with the United States shows what bad shape the industry is in. US financial groups are reporting record profits, while banks in the euro zone have lost more than €80 billion ($108 billion) in the last two years. The Europeans failed to adequately address their banking crisis. In the United States, 10 times as many ailing banks were closed and balance sheets were more consistently relieved of bad debt than in the euro zone. The ECB stress test is intended to introduce a long-overdue spring cleaning in Europe.

Banks that do not do well in the test will have to establish a larger cushion of capital or jettison risks. The ECB has repeatedly made it clear that it will not take on rotten eggs.

'We Will Not Make the Test Soft'

But the balance-sheet test also plunges the new regulatory structure into conflict. On the one hand, the ECB will have to produce a strict test to be credible from the start. The member states don't want to be humiliated by the test and will do everything they can to make their banks look good. This is why Asmussen warns: "We will not give in to the temptation to make the test soft."

On the other hand, the ECB runs the risk of producing new turbulence in the banking system with a strict test. "The test could be the trigger of a new escalation of the crisis," says the head of a German bank. He notes that as soon as it becomes clear which criteria the ECB is applying for its test, European lenders will come under heavy pressure to raise money. The future regulator plans to reveal initial indications about the standards it will set in mid-October.

Initially, the ECB will want to obtain an overview as to whether the banks have viable business models and where their greatest risks lie. The assessment of balance sheets will follow in the first half of 2014. The regulators will check to determine whether banks have assigned the correct value to their loans and bonds. The actual stress test will likely begin at the same time. It consists of a simulation to determine whether the banks would survive an economic crisis. The goal is to determine how much money the lenders lack by the fall of 2014. But the banks can't wait that long to raise capital, because the ones that lack capital will know earlier how much they need, and they will come under pressure from investors and rating agencies.

Estimates have already been made over the potential magnitude of the gaps the test will uncover. Deutsche Bank estimates that Europe's banks will need €16 billion in additional capital. Depending on which criteria the ECB applies in its tests, the gap could be much bigger. The Bundesbank, Germany's central bank, has just estimated that the seven largest German banks alone need an additional €43 billion in capital to satisfy the new international capital requirements.

These rules will only gradually take effect between now and 2019. Nevertheless, there is speculation in financial circles that the ECB is inclined to apply the stricter criteria in its tests early on. Large sums can already accumulate as a result of standardization of assessment standards, which currently differ among euro countries.

Ship Financing Loans in the Spotlight

Among German banks, the regulators will be paying especially close attention to ship financing. Commerzbank alone still has €17 billion in ship loans on its books, of which it has classified €4.6 billion as troubled, meaning that some of these borrowers are likely to default. The bank has written off about €2 billion, but is that enough?

The bank has not classified many loans as troubled. Instead, it has accommodated borrowers in various ways, including lengthening repayment periods. If the ECB decides that these loans must also be written off, analysts believe that Commerzbank could be forced make billions in further adjustments. This doesn't even account for additional cushions against a recession.

HSH Nordbank, whose government owners have just had to bolster their guarantee because of the problems with bad ship loans, will likely face even greater challenges. The state-owned bank Nord/LB could also need additional funds. "We do not anticipate additional capital needs following the balance-sheet analysis," CEO Gunter Dunkel says optimistically. But the additional capital burdens emerging from the stress tests will ultimately depend on how stringent the ECB's requirements are.

Nevertheless, German financial regulator BaFin takes a relaxed view of the issue of ship loans. Sources familiar with the supervisor's view say that the ship loans were regarded as being properly valued under existing regulatory criteria as of the end of June. This means that BaFin would have no legal right to demand more capital from the banks. Still, the ECB test could make capital increases necessary.

Studies by analysts have also identified a substantial need for capital among Italian, Spanish and Irish banks, and there are likely to be troubled candidates in almost every country. But what happens if the regulators discover a large gap? When pressed for time, many banks will have difficulty in finding investors on the market. The test could also prove some institutions not to be viable in the long run.

ECB Pushing for a Backstop at the National Level"Who pulls the ripcord?" Nord/LB CEO Dunkel, the president of the Association of German Public Banks, recently asked at a panel discussion in Brussels. If a bank that is too big to fail ran into difficulties, Dunkel said, the problems would have to be resolved within a weekend. "We're talking about ownership rights and taxpayer money," replied Peter Praet, the bearded chief economist at the ECB. The ECB, he added, could only provide advice to a resolution fund, "but certainly without voting rights." The European Commission wants to establish such a liquidation fund, but its efforts have been hampered by resistance from the German government, which doesn't want to be liable for other countries' banks.

The ECB is now pushing for a backstop, at least at the national level. It cannot assume supervision as long as it remains unclear who supports the banks when something goes wrong, ECB executive board member Yves Mersch said last week.

This means that euro-zone finance ministers will have to present a solution by October, so that the ECB can move forward with its plans to officially begin preparations for the joint bank regulatory agency in November. In Germany, the Special Financial Market Stabilization Fund (SoFFin) could step up to the plate, but not all euro countries have comparable funds with adequate means.

In the end, it could boil down to a joint European fund being forced to help weak banks, which is why a game of political finger wrestling has begun behind the scenes.

The issue of government bonds illustrates just how much the ECB is running afoul of governments in establishing the criteria for its balance-sheet test. Government bonds make up a large share of the balance sheet at many banks, because they were long seen as a solid investment. But since the Greek debt haircut, every bank executive knows that these investments are also not free of risk.

ECB Faces Growing Political Pressure

When the European Banking Authority (EBA) tried to quantify this risk in its stress tests in 2010 and 2011, it was initially hampered by resistance from European lawmakers, before default risks were partly taken into account in the second test. Nevertheless, banks are still not required to back up euro-zone sovereign debt with capital in their balance sheet.

A substantial dispute erupted in the ECB governing council last week over how to treat government bonds in the balance-sheet test. The heads of central banks from countries like France and Italy are opposed to writing down the value of government bonds to reflect their risk. They fear that this would mean that their banks would have to maintain significantly larger capital reserves to hedge against risk. Bundesbank President Jens Weidmann and a few allies, on the other hand, warned of the possible damage to the ECB's reputation. Will the ECB now bend to political pressure? If it did, market players would probably no longer take it seriously even before the stress tests begin.

The ECB has already had to agree to a compromise on the question of who checks the balance sheets. It had wanted to select outside auditors, but this might have produced poor results for some national central banks, which are responsible for bank regulation in many countries.

This led to a compromise: National regulators can continue to select the auditors themselves. The ECB will examine the results a second time with the help of consulting firm Oliver Wyman. Even that has been criticized, because the US-based company has advised banks like Belgium's KBC. "A different auditor will have to be assigned in such cases," says Sven Giegold, the Green Party's fiscal policy spokesman in the European Parliament.

In light of all the uncertainty, even the ECB is apparently not entirely convinced that the bank test will be accomplished without causing turbulence in the markets. To avert this, ECB President Mario Draghi hinted last week that it could provide banks with generous loans, as it did in the winter of 2011-2012.

Iran's president is asking aviation authorities to study the possibility of resuming direct flights between Iran and the United States for the first time in more than three decades.

Hassan Rouhani's request reflects Iranian efforts to build on groundbreaking exchanges with Washington, which have included a telephone chat last week between the new Iranian president and the US president, Barack Obama.

Iran's immediate goal is to resume talks over its nuclear programme to seek the easing of western sanctions, but Tehran also appears willing to explore expanded contacts.

The semi-official ISNA news agency quoted Akbar Torkan, a senior government official, as saying on Monday that Rouhani wanted to study the option of direct flights.

More than 1 million Iranian-Americans live in California and elsewhere. Direct flights were halted after the 1979 Islamic revolution.

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September 29, 2013

Dueling Narratives in Iran Over U.S. Relations

By MICHAEL SCHWIRTZ and DAVID E. SANGERIHT

Iran’s foreign minister said on Sunday that there was a “real chance” to reach an agreement with the United States over his country’s nuclear program, as long as Washington was prepared to end sanctions and recognize Tehran’s right to peaceful nuclear enrichment.

Even as the country’s American-educated foreign minister, Mohammad Javad Zarif, was making his comments on ABC’s “This Week,” his deputy in Iran, seeking to reassure hard-liners there, said Tehran would never fully trust the United States.

The dueling narratives underscored the complexity of any rapprochement between the two countries, despite a series of unexpected public and private exchanges in recent weeks culminating in a historic phone call Friday between President Obama and Iran’s president, Hassan Rouhani.

While Mr. Zarif is widely believed to have the backing of the country’s supreme leader to at least give negotiations a try, hard-liners among the Iranian leadership are watching warily and could try to derail an agreement.

With both the United States and Iran staking out their positions ahead of new negotiations scheduled for mid-October in Geneva, Mr. Zarif said the nuclear issue was a crucial impediment to improved relations between Iran and the United States. But he added that the “first steps” toward resolving it had been taken.

“The resolution of that issue will be a first step, a necessary first step toward removing the tensions and doubts and misgivings that the two sides have had about each other for the last 30-some years,” he said.

But even as Mr. Zarif expressed cautious optimism, the points of possible conflict between the two countries were made clear again Sunday.

A crucial demand of Iran, he said, was the removal of the international sanctions that have damaged the country’s economy. In exchange, he said, Iran would be willing to open its nuclear facilities to inspections. He did not address the sequence in which the actions would need to be taken, or the reluctance of both nations to seem to be making the first major move.

On a different talk show, “Fareed Zakaria GPS” on CNN, Susan Rice, the national security adviser, said sanctions would remain until the United States and its allies were convinced Iran was not pursuing nuclear weapons. But like Mr. Zarif, she did not discuss how a lifting of sanctions could be conducted or how much of its nuclear infrastructure Iran would have to dismantle.

In his comments on Sunday, Mr. Zarif signaled that Iran would be prepared to allow inspections, including unannounced ones, so long as they did not come in the form of demands from the United States.

“We are willing to engage in negotiations,” he said. “Of course, the United States also needs to do certain things very rapidly.”

His statement that Iran’s “right to enrich is nonnegotiable” also pointed toward a difference with the U.S. that is more than merely semantic. So far the United States has said only that the Iranians have a right to nuclear energy. The Iranians say that implies a right to enrich uranium; the West has previously negotiated deals, which ultimately fell apart, to provide Iran with nuclear fuel in a form that would be more difficult to weaponize.

In Tehran, Iran’s deputy foreign minister, Abbas Araghchi, sought to assure conservative factions that Iran remained skeptical of Washington and would not rush headlong into a deal.

“Definitely, a history of high tensions between Tehran and Washington will not go back to normal relations due to a phone call, meeting or negotiation,” Mr. Araghchi was quoted as saying by the semiofficial Fars news agency.

“We never trust America 100 percent,” he added. “And, in the future, we will remain on the same path.”

The tensions over the recent breakthroughs were evident in Iran over the weekend. On Saturday, dozens of protesters threw eggs and a shoe at Mr. Rouhani upon his return from an annual gathering of world leaders at the United Nations in New York.

At the protest in Tehran, hard-liners surrounded Mr. Rouhani’s car, shouting, “Our people are awake and hate America!”

Asked to explain such statements on Sunday, Mr. Zarif said the Iranian people hated American policies, not the American people.

“American people are nice, peace-loving, generous people who come to the aid of people in need all over the world, and this is what we respect and have a lot of admiration for,” he said.

But the policies of the American government, he said, have “unfortunately been the source of instability in our region for many years.”

Michael Schwirtz reported from New York, and David E. Sanger from Washington.

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Netanyahu plays hawk to Rouhani's dove with anti-Iran rhetoric

Israeli PM angered at thawing relations between Washington and Tehran but observers say he is out of step with allies

The Israeli prime minister, Binyamin Netanyahu, vowed to "tell the truth" about Iran's nuclear programme as he flew to the US on Sunday to meet Barack Obama and address the United Nations.

A diplomatic offensive at the UN last week by Iran's new president, Hassan Rouhani, who had a historic 15-minute phone conversation with Obama on Friday, has raised concerns in Israel, which fears improving relations between the US, one of its closest allies, and Iran, one of its worst enemies.

There is concern that if the US eases economic sanctions and removes any military threat, Tehran would be freer to create a nuclear bomb.

Officials say Netanyahu will present evidence of continued Iranian efforts to attain a nuclear weapon, and will urge the US and others not to be taken in by Rouhani's charm offensive."I will tell the truth in the face of the sweet talk and offensive of smiles," Netanyahu said on Saturday night before boarding his plane to New York. "One must talk facts and tell the truth. Telling the truth today is vital for the security and peace of the world and, of course, it is vital for the security of our country."

As Netanyahu travelled to the US, Israel's Shin Bet domestic security agency announced it had arrested an Iranian with Belgian nationality who was suspected of spying for Tehran. The agency said Ali Mansouri, 58, carried photos of the US embassy in Tel Aviv and had been promised $1m (£620,000) to set up companies in Israel on behalf of the Iranian intelligence services "to harm Israeli and western interests".

Israeli commentators said Netanyahu would have to work hard to offset the impression left by Rouhani in his UN speech and media appearances, where he presented himself as a peace-seeking moderate. "The Iranian president was very successful in convincing many in the US who want to be convinced that there is a new spirit in Tehran and a great willingness now for compromise. It will be an enormous challenge for Netanyahu to reverse that trend," said Jonathan Spyer, a senior research fellow at the Interdisciplinary Centre in Herzliya.

In the Yediot Ahronot newspaper, prominent columnist Nahum Barnea wrote that, in his phone conversation with Rouhani, Obama had "folded the flag which Netanyahu had waved to Israelis and the world, the basis of his diplomatic existence".

Barnea added: "The threat of a military attack by the US has been removed, at least in the coming months, and it is doubtful if there ever was an Israeli military threat."

Netanyahu has argued for increased sanctions on Iran, backed by a "credible military threat" that he said proved itself in the case of Syria, which under threat of a US strike agreed to international control of its chemical weapons.

The Israeli leader has urged that Iran be pressed to halt all uranium enrichment, remove enriched uranium from the country, dismantle the Fordo nuclear plant and stop "the plutonium track" to a nuclear weapon.

Yossi Alpher, an Israeli strategic analyst, said that Netanyahu's "strident tone", which included ordering the Israeli UN delegation to walk out of Rouhani's speech, meant that "he's coming across as a kind of spoiler".

"I don't think he will be able to persuasively argue that Rouhani is not worth talking to," Alpher said. "We lose a degree of credibility when we allow ourselves to be totally out of synch with our allies on this issue."

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September 29, 2013

Amid Nuclear Issue, Israel Said to Arrest Iranian Spy

By ISABEL KERSHNERIHT

JERUSALEM — Israel announced Sunday that it had recently arrested an Iranian spy who had photographed the United States Embassy building in Tel Aviv, among other things, in what appeared to be a serendipitous catch as Israel scrambled to ward off any speedy international embrace of the new Iranian leadership.

The allegations, revealed in a detailed statement issued by unnamed Israeli security officials, were impossible to verify, coming from the murky world of espionage.

But they came at an opportune moment for Prime Minister Benjamin Netanyahu as he was on his way to the United States to meet with President Obama on Monday and speak at the United Nations on Tuesday.

Mr. Netanyahu is expected to press the case against Iran’s nuclear program and warn against what he views as a deceptive charm offensive by President Hassan Rouhani of Iran, particularly after Mr. Obama’s phone call to Mr. Rouhani on Friday.

Israelis worry that an extended diplomatic process may allow Iran to reach the threshold of being able to produce a nuclear bomb. Iran insists that its nuclear program is for peaceful purposes.

But before he departed for New York, Mr. Netanyahu said, “I will tell the truth in the face of the sweet talk and the onslaught of smiles.”

The Iranian issue has been an acute source of tension between Israel and the Obama administration in the past, and it could be again.

A senior Israeli official, speaking to reporters on the condition of anonymity because he was not authorized to comment publicly, said Sunday: “We are worried Obama is looking for a way out. He said part of it right: we are looking for actions not words. But it wasn’t the same forceful language he used in the past.”

Mr. Netanyahu has instructed his ministers to refrain from commenting on the Iranian issue ahead of his speech at the United Nations. But news of the man suspected of spying quickly became part of the campaign to cast doubt on Iranian intentions. Soon after Mr. Netanyahu landed in New York, Israel Radio cited an unnamed member of his entourage as saying that the arrest of the agent was further proof that the words coming out of Iran did not match its atrocious actions and that Iran, while pretending to charm the United States, continued to practice terrorism around the world.

Israel said the man, who was arrested as he tried to leave Israel on Sept. 11, was in his 50s, was born in Iran and held Belgian and Iranian citizenship.

The Israeli security officials identified him as Ali Mansouri and said he had entered Israel with a Belgian passport under the name of Alex Mans, posing as a businessman trading in commercial windows and fixtures. They said he had visited Israel three times in the past 15 months with instructions to set up a business in Israel that could serve as a cover for “intensive intelligence and terror activities” by Iranian agencies.

He was recruited by Iran’s Islamic Revolutionary Guard Corps and handled by the Quds Force, a special operations unit, which is responsible for carrying out attacks against Israel and its interests abroad, according to the statement. It added that the man supplied Israel with information about his handlers and told his Shin Bet interrogators that he had been promised $1 million for his efforts.

The Israeli authorities released several photographs they said had been found in his possession, including two of the American Embassy.

Gad Shimron, a former Mossad intelligence official and a journalist, said he was suspicious that the timing of the announcement might have been linked to Mr. Netanyahu’s trip. “When you reveal someone like this, the Shin Bet always has an interest to turn the agent into a double agent and send false messages to the Iranians or follow the agent in Europe to reveal a network,” Mr. Shimron told Israel Radio.

But Ronen Bergman, an Israeli journalist who writes extensively on intelligence affairs, said that the release of such information by the Shin Bet was usually unconnected to political considerations.

“I am not sure that in this case it would be any different,” Mr. Bergman added.

A wave of car bombs has struck Shia neighbourhoods in Baghdad, killing at least 24 people and wounding dozens – the latest violence to rock Iraq in recent months.

The deadliest of Monday's blasts was in the eastern Sadr City district, where a parked car bomb tore through a small vegetable market and its car park, killing seven people and wounding 16, a police officer said.

That was followed by four parked car bombs, which went off in quick succession across the Iraqi capital, striking outdoor markets or car parks.

Those attacks killed a total of 17 civilians and wounded 59, officials said on condition of anonymity.

Attacks in different parts of Iraq – including two suicide bombings in the country's relatively peaceful northern Kurdish region – killed 46 people on Sunday.

No group immediately claimed responsibility for the latest attacks but they bear the hallmarks of al-Qaida's local branch in Iraq, known as the Islamic State of Iraq.

Al-Qaida is believed to be trying to build on the Sunni minority's discontent over what they consider to be second-class treatment by Iraq's Shia-led government.

The prime ministers of India and Pakistan have agreed they need to stop the recent spate of attacks in the disputed Kashmir region in order for peace talks to advance.

They also both accepted invitations to visit each other's countries, although no dates were set, a senior Indian official said.

The Indian prime minister, Manmohan Singh, and Pakistan's Nawaz Sharif met for just over an hour at a New York hotel on the sidelines of the UN general assembly in their first face-to-face meeting since Sharif was elected in May.

India and Pakistan have fought three wars, and relations between the nuclear rivals have been strained since the 2008 Mumbai attacks – blamed on Pakistan-based militants – that killed 164 people in India's commercial hub. This year, a renewed spate of violence has threatened a decade-long ceasefire on the Kashmir frontier.

The Indian national security adviser Shivshankar Menon described Sunday's meeting as useful and constructive. He said Singh and Sharif had tasked senior military officers with finding a way to shore up the ceasefire along the disputed frontier in Kashmir, known as the "line of control".

"They were both agreed that the precondition for forward movement in the relationship, which they both desire, is an improvement of the situation on the line of control where there have been repeated ceasefire violations," Menon told reporters at a briefing.

"Our overall impression of the meeting was that it was useful because it provided an opportunity for high-level contact on issues that are troubling the relationship. We will now see how both sides take it forward in the next few months."

On Thursday, twin attacks by suspected separatist rebels on Indian security forces killed 13 people in the Indian-held portion of the Himalayan region – an attack that the top elected official there said was aimed at derailing the meeting of Sharif and Singh in New York.

In comments on Friday at the general assembly, Sharif called the meeting a chance for a new beginning in relations. Singh had played down expectations.

At the meeting, Singh raised the issue of terrorism emanating from Pakistan and reiterated the need for effective action against perpetrators of the Mumbai attacks, Menon said, adding that Sharif had said that was Pakistan's intention.

Leaders of India and Pakistan last met a year ago. Pakistan's then president, Asif Ali Zardari, met Singh during a visit to India in April 2012. He was the first Pakistani head of state to visit the country in seven years. The two also met in August 2012 on the sidelines of a summit in Iran.

That progress has been set back by the upsurge in violence in Kashmir, but the need for peace is intensifying. The impending US military withdrawal from Afghanistan, where India and Pakistan have competing interests, adds fresh uncertainty to a region increasingly threatened by Islamic militancy.

Sharif, who has served before as Pakistan's prime minister but was unseated in a 1999 coup, is contending with an explosion in militant violence inside Pakistan itself. In the latest attack, a car bomb exploded on a crowded street in north-western Pakistan on Sunday, killing at least 40 people. Such attacks in the troubled city of Peshawar have claimed more than 140 lives in the past week.

Sharif wants to improve relations with India and boost trade to help Pakistan's stricken economy. But he has an uphill task in persuading India that Pakistan and its security services are willing and able to stop attacks on India.

Singh is expected to step down after elections in India next spring, but his ruling Congress party will not want to be seen as soft on Pakistan when attacks in Kashmir are increasing.

As the Australian prime minister, Tony Abbott, prepares for 24 hours of high-level talks in Indonesia, his government has tried to emphasise the strengthening of trade and investment links rather than the troubled negotiations over asylum-seeker policy.

Abbott is flying to Indonesia on Monday for an overnight visit, his first overseas trip since becoming prime minister.

Relations with Jakarta remain tense over his government's strategy to stop people trying to seek asylum in Australia by sea, which includes a plan for the country's navy to turn boats around.

His statement on Friday about the visit did not mention the asylum policy directly and said Australia's relationship with Indonesia was "broad-based", spanning business, education, defence, security and "people-to-people" links.

The visit comes after the Australian foreign minister, Julie Bishop, held talks last week with her Indonesian counterpart, Marty Natalegawa, in New York.

During the meeting, Natalegawa said he had made clear Indonesia would not co-operate on an asylum seeker policy that threatened his "country's sovereignty".

Bishop and the trade minister, Andrew Robb, will accompany Abbott on the trip while the immigration and border protection minister, Scott Morrison, stays in Australia.

On Sunday, Robb released a lengthy statement emphasising the trade aspects of the visit, saying he would be focusing on deepening "regional economic integration".

"As a government we are determined to demonstrate that Australia is very much open for business and that we are committed to being a stable and reliable trade and investment partner with all countries with which we share important relationships," he said.

Twenty business people from various Australian business sectors including agriculture, resources, banking and finance, infrastructure, manufacturing, healthcare and telecommunications will join the prime minister on the trip and take part in meetings in Indonesia.

As Abbott was due to fly out, the Howard government foreign minister, Alexander Downer, published an opinion piece in the Australian newspaper urging Abbott to resolve tensions over asylum seeker policy quickly.

He did not offer advice as to how to resolve the tension and instead argued for the "turn back the boats" policy, which has been rejected by Indonesia.

"The Indonesians don't like that but the boats are theirs, have their crews and come from their ports," he said.

"They can hardly complain that we are sending their boats back to Indonesia – their home. This issue needs to be settled and fast."

Abbott and the delegation travelling with him are due back in Australia on Tuesday.

Thousands of Sudanese protesters have taken to the streets of the capital, Khartoum, chanting "freedom" and renewing calls for their longtime autocratic president to resign after dozens of people were killed in a week of demonstrations prompted by austerity measures.

The government, which has imposed a media blackout, moved to appease the rancour with cash, saying it would distribute money to half a million families to offset higher fuel and food prices in a country where nearly half the population lives in poverty.

The street demonstrations, which began after subsidies were lifted last week, have been the most widespread in Sudan since Omar al-Bashir seized power 24 years ago.

Waving pictures of protesters who died, thousands of people held a memorial on Sunday night for Salah al-Sanhouri, a demonstrator shot on Friday during an earlier protest in Burri, an old Khartoum district.

Women called for the end to the regime and chanted "freedom, peace and justice".

Residents cheered on the marchers from rooftops while nearby security forces were stationed in pickup trucks carrying mounted machine guns near the spot where al-Sanhouri was shot.

"The protests will continue and will reach a general strike. This is our aim," said Ghazi al-Sanhouri, a nephew of the dead protester. "We will keep uncovering the regime's brutal tactics in suppressing the protests by killings and atrocities."

Al-Sanhouri's father, Moudthir al-Reih, said: "This regime will come to an end … God willing it will be over."

Public discontent had been growing over failed economic and political policies that led South Sudan to break off and became an independent state in 2011, taking approximately three-quarters of Sudan's oil production with it. Critics also blamed Bashir for draining the country's coffers by battling armed rebel movements on three different fronts.

The unrest began in the city of Wad Madani, south of Khartoum, but quickly spread to at least nine districts in Khartoum and seven cities across the country.

The crackdown on thousands of protesters has left at least 50 dead, according to international rights groups. Doctors and activists put the death toll higher, claiming it stands at more than 100. The government has acknowledged 33 have died, including police officers.

In a latest blow to freedom of the press, Sudanese authorities also forced the country's largest daily newspaper, al-Intibaha, to stop printing, according to the paper's website. The country's largest paper is owned and run by an uncle of Bashir, Al-Tayab Mustafa. Mustafa could not be immediately reached.

Several dailies came under pressure to depict demonstrators as "saboteurs". The government also closed the offices of Gulf-based satellite networks al-Arabiya and Sky News Arabia. Several newspapers were ordered to stop publication while others stopped voluntarily to avoid government pressure.

In an interview with al-Arabiya Sunday, Sudan's foreign minister defended the move, saying: "Media make revolutions".

"If the revolution is created by media, we have to be serious in dealing with it," he said from New York, where he was attending the UN general assembly.

Diaa Eddin Belal, editor-in-chief of al-Sudani newspaper, said editions of his paper were confiscated and they have been ordered to stop printing three times since Wednesday. Back to work on Sunday, Belal said that in one incident on Friday the papers had been on their way to distribution centres when he received a phone call from police telling him that there would be no papers that day.

"The government feels that its own existence is endangered and the press is playing a role in influencing public opinion … they want papers to turn into official gazettes that reflect only [the government's] point of view with no criticism or negative feedback," he said.

In a move aimed at pacifying a frustrated public, the government said on Sunday it would distribute one-off payments to families in need, raise the minimum wage and boost public sector salaries.

The official Suna news agency reported that the minister of social solidarity, Mashair al-Dawlab, ordered 500,000 families to be given 150 Sudanese pound (£13) aid packages in early October. It also quoted the deputy finance minister as saying the public sector salary increases would start at the same time.

Meanwhile, Sudan's main labour union said a rise in minimum wages promised since January would be implemented in the next two days.

Still concerned about lingering protests, however, the education ministry said on Sunday that schools would remain closed until 20 October. Schools have been closed since Wednesday after high school students led protests against Bashir in different districts of the capital.

The Malian army has engaged in an exchange of fire with militants believed to be separatist rebels in the first explosion of violence in the northern town of Kidal since the rebels said they were suspending participation in a peace accord.

An explosion went off on Sunday afternoon in Kidal, a provincial capital, near a former storage facility for the United Nations World Food Programme. No casualties were reported, and authorities said it may have been an accident.

The blast rattled residents a day after suicide car bombers struck the town of Timbuktu near a military camp, killing two people and wounding seven others.

Hubert de Quievrecourt, a communications adviser with the French military, said the incident in Kidal on Sunday took place near the headquarters of the Tuareg rebel group the National Movement for the Liberation of the Azawad, the name they give to their homeland.

"We think it's an accidental explosion caused by the poor handling of an explosive device but the circumstances are not yet clear," he told the Associated Press. "What is certain is that no one was killed or wounded."

The National Movement for the Liberation of Azawad recently withdrew from a peace accord it had signed with the government, which had allowed for the controversial return of the Malian military to Kidal.

The deal also allowed for the July presidential election to proceed, the first since a March 2012 coup accelerated the chaos in the long democratic west African nation. In the aftermath, the secular Tuareg rebels and radical al-Qaida-linked jihadists both took control in northern Mali. The Tuareg rebels later retreated until a French-led military intervention ousted the jihadists from the country's northern provincial capitals.

ISTANBUL — A court in Bahrain handed down sentences of between 5 and 15 years in jail for 50 people on Sunday whom the authorities accused of belonging to a protest movement seeking to overthrow the government, human rights activists said.

The Reuters news agency reported that officials were preparing an announcement about the court’s action, but by late Sunday night none had been issued.

The defendants in the case included a prominent human rights worker, political activists and several exiled opponents of the government, the activists said.

The court’s action, if it is confirmed, would appear to be part of a widening effort by the authorities to quash protests led by members of Bahrain’s Shiite majority against the Sunni monarchy, which has been accused by its opponents of discriminating against Shiites and monopolizing power. It seemed likely to fuel further criticism of the monarchy, which has imprisoned or detained a growing number of its most vocal opponents over the last two and a half years of protests.

Earlier this month, in an escalation of the crackdown, the authorities arrested Khalil al-Marzooq, a former member of Parliament and a leader in Bahrain’s mainstream opposition group, al-Wefaq, which had been engaged in dialogue with the government.

In June, the authorities announced the arrest of “key actors” in the February 14th Youth Coalition, named for the day in 2011 when protests erupted in Bahrain, joining a wave of popular uprisings in Tunisia, Egypt and elsewhere in the region.

As the protests have persisted, in what Bahrain’s opposition calls the “forgotten revolt,” the February 14th Youth Coalition has emerged as a leading organizer of the demonstrations, many of them staged in Bahrain’s neglected Shiite villages.

The government has portrayed the group as a clandestine movement of foreign-backed militants, citing as evidence the use of explosives, the blocking of roads and burning of tires during violent confrontations with the police. In announcing the arrests, the government said that defendants had admitted their responsibility for several attacks.

Said Yousif al-Muhafda of the Bahrain Center for Human Rights said that some of the defendants told the judge in the case that they had confessed after being tortured. He said the detainees included Naji Fateel, a human rights activist who was sentenced to 15 years.

Mr. Muhafda said it was implausible that Mr. Fateel and other activists who frequently spoke to the news media were part of a hidden conspiracy, as the government alleged.

When Hugo Chávez died eight months ago, hundreds of thousands of bereaved Venezuelans flocked past his open coffin to say their final goodbyes. It is no surprise then that a recording of the late leader claiming to be alive would cause a stir.

In the audio recording, a voice similar to Chávez's says he is being held captive against his will, accusing his former friends of betraying him.

President Nicolás Maduro to declare it the latest attempt by the opposition to destabilise the government.

Maduro, chosen by Chávez as his preferred successor, accused the main opposition party, Primero Justicia, of faking the clip, in which a weakened Chávez calls his brother, Adan Chávez, a state governor, to say he is alive.

"They [the opposition] have no respect for the memory and the love that the Venezuelan people have for Hugo Chávez and they are capable of inventing these recordings," Maduro said at the weekend.

The voice claiming to be Chávez says he is convalescing and his closest friends betrayed him. It pleads with his brother to tell Venezuelans the truth.

"Who would have thought our enemy was within? How many hugs they gave me, how many handshakes and how many lies," the voice says. "I want you to tell the boys, that today, September 16, I am more alive than ever."

The recording's veracity was firmly denied by Adan Chávez. "This disgusting montage has prompted some to believe that Chávez didn't die and that he is hiding. Others think that this recording was done before his death. It is all a great lie.

"Hugo Chávez was buried alongside the love of his loyal and revolutionary people, and he never sent me a message of this type."

The president of the national assembly, Diosdado Cabello, said the release of this recording was a political tactic aimed at discouraging United Socialist party supporters from voting in the December elections.

"This is clearly to demoralise our people, to inhibit them like they did in the April polls," Cabello said of the presidential elections that gave Maduro a razor-thin victory over opposition leader, Henrique Capriles.

But some political analysts suggest the recording could have been released by the government. "It is fundamental to monopolise the control [of Chávez's image]. It also appears clear that this is an opportunity to blame the opposition of an attempt to destabilise with which they maintain a polarisation that benefits them," says Luis Vicente Léon, one of Venezuela's leading political consultants.

This is not the first time Chávez has been imitated. During his first presidential campaign in 1998, a clip with a voice claiming to be him and threatening to "fry his opponents' heads" caused a national commotion.

WASHINGTON — As the nation’s spy agencies assess the fallout from disclosures about their surveillance programs, some government analysts and senior officials have made a startling finding: the impact of a leaked terrorist plot by Al Qaeda in August has caused more immediate damage to American counterterrorism efforts than the thousands of classified documents disclosed by Edward Snowden, the former National Security Agency contractor.

Since news reports in early August revealed that the United States intercepted messages between Ayman al-Zawahri, who succeeded Osama bin Laden as the head of Al Qaeda, and Nasser al-Wuhayshi, the head of the Yemen-based Al Qaeda in the Arabian Peninsula, discussing an imminent terrorist attack, analysts have detected a sharp drop in the terrorists’ use of a major communications channel that the authorities were monitoring. Since August, senior American officials have been scrambling to find new ways to surveil the electronic messages and conversations of Al Qaeda’s leaders and operatives.

“The switches weren’t turned off, but there has been a real decrease in quality” of communications, said one United States official, who like others quoted spoke on the condition of anonymity to discuss intelligence programs.

The drop in message traffic after the communication intercepts contrasts with what analysts describe as a far more muted impact on counterterrorism efforts from the disclosures by Mr. Snowden of the broad capabilities of N.S.A. surveillance programs. Instead of terrorists moving away from electronic communications after those disclosures, analysts have detected terrorists mainly talking about the information that Mr. Snowden has disclosed.

Senior American officials say that Mr. Snowden’s disclosures have had a broader impact on national security in general, including counterterrorism efforts. This includes fears that Russia and China now have more technical details about the N.S.A. surveillance programs. Diplomatic ties have also been damaged, and among the results was the decision by Brazil’s president, Dilma Rousseff, to postpone a state visit to the United States in protest over revelations that the agency spied on her, her top aides and Brazil’s largest company, the oil giant Petrobras.

The communication intercepts between Mr. Zawahri and Mr. Wuhayshi revealed what American intelligence officials and lawmakers have described as one of the most serious plots against American and other Western interests since the attacks on Sept. 11, 2001. It prompted the closing of 19 United States Embassies and consulates for a week, when the authorities ultimately concluded that the plot focused on the embassy in Yemen.

McClatchy Newspapers first reported on the conversations between Mr. Zawahri and Mr. Wuhayshi on Aug. 4. Two days before that, The New York Times agreed to withhold the identities of the Qaeda leaders after senior American intelligence officials said the information could jeopardize their operations. After the government became aware of the McClatchy article, it dropped its objections to The Times’s publishing the same information, and the newspaper did so on Aug. 5.

In recent months, senior administration officials — including the director of national intelligence, James Clapper Jr. — have drawn attention to the damage that Mr. Snowden’s revelations have done, though most have been addressing the impact on national security more broadly, not just the effect on counterterrorism.

“We have seen, in response to the Snowden leaks, Al Qaeda and affiliated groups seeking to change their tactics, looking to see what they can learn from what is in the press and seek to change how they communicate to avoid detection,” Matthew Olsen, the director of the National Counterterrorism Center, told a security conference in Aspen, Colo., in July.

American counterterrorism officials say they believe the disclosure about the Qaeda plot has had a significant impact because it was a specific event that signaled to terrorists that a main communication network that the group’s leaders were using was being monitored. The sharpest decline in messaging has been among the Qaeda operatives in Yemen, officials said. The disclosures from Mr. Snowden have not had such specificity about terrorist communications networks that the government is monitoring, they said.

“It was something that was immediate, direct and involved specific people on specific communications about specific events,” one senior American official said of the exchange between the Qaeda leaders. “The Snowden stuff is layered and layered, and it will take a lot of time to understand it. There wasn’t a sudden drop-off from it. A lot of these guys think that they are not impacted by it, and it is difficult stuff for them to understand.”

Other senior intelligence and counterterrorism officials offer a dissenting view, saying that it is difficult, if not impossible, to separate the impact of the messages between the Qaeda leaders from Mr. Snowden’s overall disclosures, and that the decline is more likely a combination of the two.

“The bad guys are just not going to talk operational planning electronically,” said one senior counterterrorism official. Moreover, that official and others say, it could take months or years to fully assess the impact of Mr. Snowden’s disclosures on counterterrorism efforts.

Over the past decade, the N.S.A. has invested billions of dollars in a clandestine campaign to preserve its ability to eavesdrop. The agency has circumvented or cracked much of the encryption, or digital scrambling, that guards global commerce and banking systems, protects sensitive data like trade secrets and medical records, and automatically secures the e-mails, Web searches, Internet chats and phone calls of Americans and others around the world, according to documents provided by Mr. Snowden.

The government’s greatest fear concerning its counterterrorism operations is that over the next several months, the level of intercepted communications will continue to fall as terrorists most likely find new ways to communicate with one another, one senior American official said. It will likely take the government some time to break into that method and monitor communications.

One way the terrorists may try to communicate, the official said, is strictly through couriers, who would carry paper notes or computer flash drives. If that happens, the official said, terrorists will find it very difficult to communicate as couriers take significant time to move messages.

“The problem for Al Qaeda is they cannot function without cellphones,” said one former senior administration official. “They know we listen to them, but they use them anyhow. You can’t run a sophisticated organization without communications in this world. They know all this, but to operate they have to go on.”

A senior intelligence official put it this way: “They are agile, we are agile. When we see a change in behavior, our guys are changing right along with it, or we’re already seeing it and adapting to it. Our capabilities are changing in hours and days, versus weeks and months like we used to.”

To be sure, Qaeda leaders and their top lieutenants use other secure electronic communications as well as old-fashioned means — like couriers, as Bin Laden did — that pose major challenges to American intelligence services.

In the past few months, the Global Islamic Media Front, the propaganda arm of Al Qaeda and other Islamic terrorist groups, has released new software that allows users to encrypt communications for instant-messaging and cellphones. Officials say these new programs may pose fresh challenges for N.S.A. code breakers.

Jihadists have been working on camouflaging their communications through encryption software for years.

Al Qaeda’s use of advanced encryption technology dates to 2007, when the Global Islamic Media Front released the Asrar al-Mujahedeen, or so-called “Mujahedeen Secrets,” software. An updated version, Mujahedeen Secrets 2, was released in January 2008, and has been revised at least twice, most recently in May 2012, analysts said.

The program was popularized in the first issue of Inspire, Al Qaeda in the Arabian Peninsula’s quarterly online magazine, in a July 2010 post entitled “How to Use Asrar al-Mujahedeen: Sending and Receiving Encrypted Messages.”

Since then, each issue of Inspire has offered a how-to section on encrypting communications, recommending MS2 as the main encryption tool.

Shortly after Mr. Snowden leaked documents about the secret N.S.A. surveillance programs, chat rooms and Web sites used by jihadis and prospective recruits advised users how to avoid N.S.A. detection, from telling them to avoid using Skype to recommending specific online software programs like MS2 to keep spies from tracking their computers’ physical locations.

A few months ago, the Global Islamic Media Front issued new software that relies on the MS2’s “Asrar al-Dardashah, or “Secrets of Chatting,” which allows users to encrypt conversations over instant-messaging software like Paltalk, Google Chat, Yahoo and MSN, according to Laith Alkhouri, a senior analyst at Flashpoint Global Partners, a New York security consulting firm that tracks militant Web sites.

In early September, the Global Islamic Media Front said it had released an encryption program for messages and files on mobile phones running the Android and Symbian operating systems.

According to the group, the software can encrypt text messages and files and send them by e-mail or between cellphones with different operating systems. The software also lets users securely check e-mail and prevents users from receiving nonencrypted messages, the group claimed.

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US government on verge of shutdown as House votes to delay health law

Resolution passed Sunday, makes funding government until December contingent upon one-year delay of healthcare reforms

The US government is on the precipice of a historic shutdown that would result in hundreds of thousands of federal workers being placed on unpaid leave, after House Republicans refused to pass a budget unless it involved a delay to Barack Obama's signature healthcare reforms.

Democratic leaders declined to convene the Senate on Sunday, standing firm against what they described as the extortion tactics of their Republican opponents who they accused of holding the government to ransom for ideological reasons.

The resolution passed by the Republican-controlled House of Representatives in the early hours of Sunday morning makes funding the government until the middle of December contingent upon a one-year delay of the Affordable Care Act. It also strips the new healthcare law, which is due to come into force on Tuesday, of a key tax on medical devices.

Senate Democrats and the White House have said they will block any budget resolution that is tied to the healthcare law – known as Obamacare – which was passed three years ago and upheld by the US supreme court last year.

Undermining the healthcare reforms – the flagship legislative achievement of Obama's presidency – has been a priority for the conservative wing of the Republican party for years and the spectre of government shutdowns has been used in the past.

However there was a growing sense on Capitol Hill on Sunday that House Republicans were prepared to see through their threat of a shutdown, which would begin at 12.01am ET on Tuesday, even though polls show they would be blamed for a maneuver that could damage the party during next year's midterm elections.

"Republicans in Congress had the opportunity to pass a routine, simple continuing resolution that keeps the government running for a few more weeks," said White House spokesman Jay Carney. "But instead, Republicans decided they would rather make an ideological point by demanding the sabotage of the healthcare law."

Harry Reid, the Senate leader who on Saturday said he would refuse to bow to "Tea Party anarchists", showed no interest in negotiating with Republicans over the stalemate. He was criticised by leading Republicans for failing to invite the Senate to debate the House resolution, less than 36 hours from the budget deadline.

Instead, the Senate was expected to wait until Monday before stripping the Republican motion of its references to Obamacare and, for the second time in a week, returning a "clean" bill to the House that would fund federal departments, without also impeding the introduction of mandatory healthcare for Americans who are uninsured.

If there is time, the House would then have just a few hours to either vote to fund the government, free of any measures that would impede the introduction Obamacare, or trigger the first American government shutdown in 17 years.

Asked if he thought a shutdown was now inevitable, Richard Durbin, the second most senior Democrat in the Senate, replied: "I'm afraid I do."

Durbin told CBS's Face the Nation that he was open to negotiating over the tax on medical devices, "but not with a gun to my head, not with the prospect of shutting down the government".

Senior Republicans took to the Sunday morning talk shows to defend their stance, claiming that it was Democrats who were forcing a shutdown by refusing to compromise over the controversial healthcare reforms.

Congresswoman Cathy McManus Rogers, chair of the House Republican conference, said Reid was acting irresponsibly by refusing to hold a session of the Senate. "They're the ones threatening a government shutdown by not being here," she said.

Ted Cruz, the Republican senator spearheading the congressional campaign to undo Obama's healthcare reforms, turned the debate on its head by accusing Democrats of holding "political brute force" for refusing to delay or unravel the healthcare law.

"If we have a shutdown, it will be because Harry Reid holds that absolutist position and essentially holds the American people hostage," Cruz, who this week gave a 21-hour speech to draw attention to his campaign, said on NBC's Meet the Press.

"So far, majority leader Harry Reid has essentially told the House of Representatives and the American people, 'go jump in a lake'," Cruz added. "He says: 'I'm not willing to compromise, I'm not willing to even talk.' His position is, 100% of Obamacare must be funded in all instances. Other than that, he's going to shut the government down."

The impact of any federal shutdown would depend upon how long it lasts. Under contingency arrangements, essential services such as law enforcement, will be kept alive, although hundreds of thousands of federal workers would be placed on unpaid leave.

Social security and Medicare benefits would continue, and air traffic controllers would remain in place to ensure airports function. However museums, national parks and landmarks such as the Statue of Liberty and Washington Monument, would be closed.

The military's 1.4 million personnel active duty would remain in post, but their paychecks would be delayed. About half of the Defense Department's civilian employees – about 800,000 people – would be furloughed, meaning they would be suspended from work without pay.

Federal courts would continue to function as usual for around a fortnight, after which the judiciary would have to start shelving work that is not considered essential.

The gridlock over the government budget could be just the prelude to an even more serious showdown expected in mid-October over the government debt ceiling.

Republicans are threatening to refuse to lift the ceiling unless Obamacare is reined back, which could mean the US Treasury would be forced to default on its debt payments.

US Republicans have voted to postpone Barack Obama's heathcare reforms, setting up a high-stakes clash with Democrats that could spark the first American government shutdown in 17 years.

With less than 48 hours to go until existing federal government spending authority expires on Monday night, House Republicans passed a continuing budget resolution until December, but only if Obamacare – the Patient Protection and Affordable Care Act – is delayed for a year and stripped of a key tax on medical devices.

But even before the vote took place in the early hours of Sunday morning, Democrats said they would reject the plan – and the White House issued a statement saying Obama would veto it should it ever reach his desk.

The Senate majority leader, Harry Reid, issued a statement on Saturday saying his chamber would not accept the House Republicans' plan, and any attempt to delay the healthcare law would be pointless.

House Republicans also plan to pass separate legislation ensuring that American troops continue to receive pay during any ensuing shutdown, exempting a politically sensitive area of federal government from the consequences of their standoff with Obama.

The Senate has already rejected one House attempt to link spending authorisation to Obamacare, but with the majority Republican caucus seemingly united in its desire for a showdown over Obamacare the spending resolution has been passed back a second time to the Senate.

Obama has accused Republicans of holding the US economy to ransom and has upped his rhetoric in recent days to make it clear he would also veto any resolution that involved Obamacare.

The House speaker, John Boehner, refused to speak to reporters after his meeting with Republicans on Saturday afternoon, although he is expected to begin outlining the plan on the floor of the House.

The last time the US government was deprived of funding in this way was under the presidency of Bill Clinton in 1995 and 1996, when he clashed with the Republican speaker Newt Gringrich.

Under the Anti-Deficiency Act, passed after the American civil war in 1870, the federal government is forbidden from incurring costs that have not been explicitly authorised by Congress.

Only staff involved in "emergencies involving the safety of human life or the protection of property" are exempt, which in practice means many "essential workers" deemed vital to security and law enforcement.

But hundreds of thousands of other federal employes will be "furloughed" or told to stay at home from Tuesday morning if Congress cannot find a way around the growing impasse. Social security and other benefit payments may also be delayed.

In a speech on Friday, Obama warned that military personnel on active duty could see their pay disrupted but the Republican plan to exempt armed forces removes one area of leverage that might have forced conservatives to back down.

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Cruz: Killing Obamacare for one year is ‘the essence of a compromise’

By David EdwardsRawStorySunday, September 29, 2013 11:33 EDT

Sen. Ted Cruz (R-TX) on Sunday asserted that the Republican threat to shutdown the government if President Barack Obama’s health care reform law was not delayed for at least one year was the “essence of a compromise.”

During an interview on NBC’s Meet the Press, host David Gregory noted that Cruz had “not engaged in a debate on how to change the law.”

“The premise of your question is wrong,” Cruz insisted. “It is the Democrats who have taken the absolutist position. Look, I’ve engaged — I’d like to repeal every word of the law, but that wasn’t my position even in this fight. But my position in this fight is we should defund it, which is different from repeal.”

“And even now, what the House of Representatives has done is a step removed from defunding, it’s delaying it,” he added. “Now, that’s the essence of a compromise… On the other side, what have the Democrats compromised on? Zero. Nothing.”

Gregory pointed out Cruz had spent the entire summer campaigning against Obamacare and gave a marathon 21-hour speech on the Senate floor, but ended up with less senators supporting his effort than he started with.

“You haven’t moved anyone,” the NBC host said.

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September 30, 2013

Justice Department Poised to File Lawsuit Over Voter ID Law

By CHARLIE SAVAGENYT

WASHINGTON — The Justice Department is expected to sue North Carolina on Monday over its restrictive new voting law, further escalating the Obama administration’s efforts to restore a stronger federal role in protecting minority voters after the Supreme Court struck down part of the Voting Rights Act, according to a person familiar with the department’s plans.

The lawsuit, which had been anticipated, will ask a federal court to block North Carolina from enforcing four disputed provisions of its voting law, including a strict photo identification requirement. The lawsuit will also seek to reimpose a requirement that North Carolina obtain “preclearance” from the federal government before making changes to its election rules.

The court challenge will join similar efforts by the Justice Department’s Civil Rights Division in Texas over that state’s redistricting plan and voter photo ID law. Those lawsuits are seeking to return Texas to federal “preclearance” oversight.

In June, all five Republican-appointed Supreme Court justices voted to do away with a provision in the Voting Rights Act that required North Carolina, Texas and six other states with histories of discrimination, mostly in the South, to obtain permission from the Justice Department or a federal court before changing their election procedures. All four Democratic-appointed justices dissented.

Since that ruling, Republican-controlled states have rushed to impose new limits on voting. Republicans say the restrictions are necessary to combat voter fraud.

There is no evidence of significant in-person impersonation fraud, the type ID laws can prevent. Democrats say the restrictions are intended to discourage groups that tend to support Democrats, like students, poor people and minorities.

North Carolina’s law cut back on early-voting days, eliminated the ability of people to register to vote on the same day as casting an early ballot, and prohibited the counting of provisional ballots cast by eligible voters who went to the wrong precinct.

It also requires voters to present photo identification to cast ballots, but does not allow student IDs, public-employee IDs or photo IDs issued by public assistance agencies. Black voters in North Carolina are disproportionately likely to lack identification issued by the State Department of Motor Vehicles, according to state data.

All four provisions are being challenged by the Justice Department, the person familiar with the plans said.

Other provisions of the law, like banning paid voter registrations, are not being challenged by the department.

When signing the bill into law last month, Gov. Pat McCrory portrayed the steps as popular measures that would bring the state into alignment with rules in many other jurisdictions.

“North Carolinians overwhelmingly support a common-sense law that requires voters to present photo identification in order to cast a ballot,” Mr. McCrory, a Republican, said in a statement at the time. “I am proud to sign this legislation into law. Common practices like boarding an airplane and purchasing Sudafed require photo ID, and we should expect nothing less for the protection of our right to vote.”

The Supreme Court ruling in June left intact other parts of the Voting Rights Act, including a provision that bars discriminatory voting rules anywhere — whether or not the disparate impact was intentional — and another provision that allows a court, in cases in which a state is found to have intentionally discriminated, to impose federal preclearance requirements on future changes.

Election law specialists expressed caution. Richard H. Pildes, a New York University law professor, said the Justice Department faced a complex legal challenge, “particularly when some of these changes, such as reducing early voting, involve measures that make voting more convenient but don’t restrict direct access to the ballot box.”

Richard L. Hasen, a law professor at the University of California, Irvine, said the department would “have a hard time proving constitutional or Voting Rights Act violations against North Carolina,” adding that proving intentional racial discrimination is difficult and “even though many minority voters are Democrats, discrimination against Democrats cannot be the basis for these voting claims.”

Attorney General Eric H. Holder Jr. has repeatedly promised “aggressive” action to protect voting rights. In a speech this month, he called the June Supreme Court ruling “deeply flawed” and said the Justice Department would “not allow the court’s action to be interpreted as ‘open season’ for states to pursue measures that suppress voting rights.”

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September 29, 2013

A Wave of Sewing Jobs as Orders Pile Up at U.S. Factories

By STEPHANIE CLIFFORDNYT

MINNEAPOLIS — It was past quitting time at a new textile factory here, but that was not the only reason the work floor looked so desolate. Under the high ceilings, the fluorescent lights still bright, there were just 15 or so industrial sewing machines in a sprawling space meant for triple that amount.

The issue wasn’t poor demand for the curtains, pillows and other textiles being produced at the factory. Quite the opposite. The owner, the Airtex Design Group, had shifted an increasing amount of its production here from China because customers had been asking for more American-made goods.

The issue was finding workers.

“The sad truth is, we put ads in the paper and not many people show up,” said Mike Miller, Airtex’s chief executive.

The American textile and apparel industries, like manufacturing as a whole, are experiencing a nascent turnaround as apparel and textile companies demand higher quality, more reliable scheduling and fewer safety problems than they encounter overseas. Accidents like the factory collapse in Bangladesh earlier this year, which killed more than 1,000 workers, have reinforced the push for domestic production.

But because the industries were decimated over the last two decades — 77 percent of the American work force has been lost since 1990 as companies moved jobs abroad — manufacturers are now scrambling to find workers to fill the specialized jobs that have not been taken over by machines.

Wages for cut-and-sew jobs, the core of the apparel industry’s remaining work force, have been rising fast — increasing 13.2 percent on an inflation-adjusted basis from 2007 to 2012, while overall private sector pay rose just 1.4 percent. Companies here in Minnesota are so hungry for workers that they posted five job openings for every student in a new training program in industrial sewing, a full month before the training was even completed.

“It withered away and nobody noticed,” Jen Guarino, a former chief executive of the leather-goods maker J. W. Hulme, said of the skilled sewing work force. “Businesses stopped investing in training; they stopped investing in equipment.”

Like manufacturers in many parts of the country, those in Minnesota are wrestling with how to attract a new generation of factory workers while also protecting their bottom lines in an industry where pennies per garment can make or break a business. The backbone of the new wave of manufacturing in the United States has been automation, but some tasks still require human hands.

Nationally, manufacturers have created recruitment centers that use touch screens and other interactive technology to promote the benefits of textile and apparel work.

Here, they are recruiting at high schools, papering churches and community centers with job postings, and running ads in Hmong, Somali and Spanish-language newspapers. And in a moment of near desperation last year — after several companies worried about turning down orders because they did not have the manpower to handle them — Minnesota manufacturers hatched their grandest rescue effort of all: a program to create a skilled work force from scratch.

Run by a coalition of manufacturers, a nonprofit organization and a technical college, the program runs for six months, two or three nights a week, and teaches novices how to be industrial sewers, from handling a sewing machine to working with vinyl and canvas.

Eighteen students, ranging from a 22-year-old taking a break from college to a 60-year-old former janitor who had been out of work for three months, enrolled in the inaugural session that ended in June. The $3,695 tuition was covered by charities and the city of Minneapolis, though students will largely be expected to pay for future courses themselves.

After the course, the companies, which pay to belong to the coalition, sponsored students for a three-week rotation on their factory floors and a two-week internship at minimum wage. Then the free-for-all began as the members competed to hire those graduates who decide to pursue a career in industrial sewing.

“We need to think practically about getting skilled labor,” said Ms. Guarino, a founder of the training effort, known as the Makers Coalition. “The growth is there but we’re going to be in trouble if we don’t have a pool to draw from.”

Last year, there were about 142,000 people employed as sewing machine operators in the United States, according to the Bureau of Labor Statistics. In the Minneapolis-St. Paul metro area, which had almost 1.75 million workers last year — and where the unemployment rate as of July was 4.9 percent — only 860 were employed in 2012 as machine sewers..

Airtex had room for 50 of them. “We are looking for new sewers every day,” said Mr. Miller, the Airtex executive.

Wooing Immigrant Workers

Airtex’s roots in Minneapolis date to 1918, when Mr. Miller’s grandfather started the Sam Miller Bag Company, specializing in potato and feed bags. In the 1980s, Susan Shields founded a baggage company, and the two combined in 2000 as the Airtex Design Group, producing home textiles for companies like Pottery Barn and Restoration Hardware.

Soon after the merger, the company began producing in China, first in the Dongguan area, then Wuxi and Shanghai. Today, it still employs about 100 Chinese workers through a partner factory in Dongguan, but production there is no longer the bargain it once was, said Ms. Shields, Airtex’s president.

Initially Airtex paid $3 an hour on average for its Chinese workers; now, it pays about $11.80 an hour, including benefits and housing.

Its American factory-floor workers make about $9 to $17 an hour, though Airtex estimates benefits add another 30 percent to those figures.

As costs were rising in China, Airtex was also getting a new message from some of its clients: They wanted more American-made products.

Health care clients wanted medical slings and other sensitive medical products made domestically to ensure quality. Retailers did not want to pay overseas freight costs to import bulky items like pillows, and they wanted more flexibility in turning around designs quickly. As Airtex considered production in Vietnam and elsewhere, it became concerned about safety and quality issues — and increasingly interested in the American alternative.

“The opportunity for domestic business right now is unbelievable,” Ms. Shields said. “Either we start to bring it back here, more of it, or we start going to places that are marginally unsafe.”

But the lack of workers here in Minnesota made shifting business back home frustrating.

It had gotten to the point where new business sometimes felt like a headache, not an opportunity. As Mr. Miller was headed to Chicago for a sales pitch in February, for instance, he was more worried than excited about landing a new contract.

“What concerns me is, if I get it,” he said, “where are we going to find the people?”

In the various waves of American textile production, dating to the 1800s, the problem of an available and willing work force solved itself.

Little capital was required — the boss just needed sewing equipment and people willing to work. That made it an attractive business for newly arrived immigrants with a few dollars to their name and, often, some background in garment work. Typically, the mostly male factory owners would recruit female workers from their old countries for the grunt work.

From the 1840s until the Civil War, it was new arrivals from Ireland and Germany. From the 1880s through the 1920s, it was Russian Jews and Italians, who would buy newly mass-produced Singer sewing machines and often set up shops in their tenement apartments with wives, daughters and tenants making up the initial work force, said Daniel Katz, provost of the National Labor College and author of a book about the garment industry.

Puerto Ricans, who were given citizenship on the eve of American entry into World War I, and black migrants from the South rounded out the work force until the 1960s, when Chinese and Dominican laborers took over, Mr. Katz said.

In San Francisco and New York, a small number of Chinese women came to the United States despite the Chinese Exclusion Act in 1882 barring Chinese laborers, making up a base of garment workers. After 1965, when immigration restrictions eased and Chinese were allowed to join family members, greater numbers of women came and that pool of workers grew.

“It was pretty well known that basically the day after you landed, you’d be taken to a factory by a relative to learn how to use an industrial sewing machine,” said Katie Quan, associate chair of the Labor Center at the University of California, Berkeley. In Los Angeles, Latinos made up much of the work force. And in the Carolinas, Hmong immigrants filled textile manufacturing jobs well into the 1990s, halting — or at least delaying — the migration of jobs overseas, said Rachel Willis, an American studies professor at the University of North Carolina.

Now, here in Minnesota, immigrants are once again being seen as the new hope.

Wanted: English and Math

Last fall, Lifetrack, a nonprofit group in St. Paul that helps immigrants, people on welfare and those with disabilities, began screening clients for possible admission to the sewing training program. Inside a gray-green room in a building on the edge of a four-lane road, people gathered around three tables: Burmese women at one of them, Ethiopian men at another, and at the back of the room an African-American woman, then 61, and a white man, 60, both born in America.

The first task was for students to test their English and math proficiency. Language skills are essential so workers can communicate with their bosses, but math skills are just as important in textile work because sewing requires precise measurements. As the students worked on the proficiency tests, Tatjana Hutnyak, Lifetrack’s director of business development, went over the basics.

Starting wages: $12 and $16 an hour. Transportation: The college, Dunwoody College of Technology, is on a bus line, but if students interview with a company not on a bus line, Lifetrack will help them get there. After passing career-readiness tests, students could qualify for the course, which would give them a certificate in industrial sewing — and, ideally, a job.

“They want to have a career rather than packaging, assembling, cleaning jobs,” said a Lifetrack manager, Dagim Gemeda, explaining why clients were interested in the sewing certification.

The Burmese women had come to Minnesota after spending time in refugee camps in Thailand. Paw Done had done piece work, sewing at home while she watched her children. The others had little sewing experience.

The Ethiopian men, who ranged in age from 21 to 42, had been in this country several years. A couple were students, one was a former custodian who had moved from another state to be close to his college-bound son, and a fourth, Abdulhakim Tahiro, had been laid off from his job at an airport car rental kiosk.

Mr. Tahiro and Ms. Done enrolled in the course that started last January, when about half of the class were immigrants. Another student in the course, Patricia Ramon, 56, was an entrepreneur in Mexico with sewing experience. Ms. Ramon already had a job as a sewer at J. W. Hulme, but quit to take the course with the goal of obtaining certification. She wanted proof, she said, that she had technical skills.

“I am not like an old-time seamstress,” Ms. Ramon said. She expects to sew as a career, and said that making $16 an hour with health insurance would be enough to live on.

The students who were not immigrants often had difficult work histories or other problems. One of them was Lawrence Corbesia, the man sitting at the back table during the screening session. He was a former machine operator and custodial worker who had been looking for work for three months.

Another was Edward Johnson, 44, who was homeless when the course started. After food service and call-center jobs, he went to prison for felony assault, and had a tough time finding a job when he got out in 2009. He moved to Wisconsin to pick fruit, moved back to Minneapolis because he hated picking fruit, and was living on the streets and selling watercolor paintings when a homeless-center counselor hooked him up with the sewing program.

Until now, the only sewing experience Mr. Johnson had was sewing on buttons — a punishment meted out by his mother when he misbehaved. To save money, Mr. Johnson walked the 45 minutes to and from the college.

The program was overwhelming at first, he said, “so frustrating that sometimes I’d go home crying.” But he spent days at the library, watching YouTube videos on sewing techniques and studying terms used by the industry. By the end, it had gotten easier, he said, making pajamas, tote bags and aprons.

So many people are on government assistance, he said. “I’d rather learn a trade and go to work — and work,” he said.

For Edward Johnson, 44, a criminal record made it hard for him to get a job. He turned to an industrial sewing program after enduring bouts of homelessness and unemployment.

A Long-Term Solution

Manufacturers elsewhere are also trying to build a new labor pool.

In a former glove factory in Conover, N.C., the Manufacturing Solutions Center has touch screens showing the technologies that textile manufacturers use today, while new machines spool out printed fabric. In Pennsylvania, a work force investment board has started a program with plant tours, YouTube videos of workers and a Web site promising that “contrary to popular opinion, many good jobs in manufacturing are still available.”

Other industry groups have created a curriculum for high schools on manufacturing, including Manufacturing Day, with factory tours for school groups.

Still the difficulty attracting young people frustrates Debra Kerrigan, a dean at Dunwoody overseeing the Minnesota program.

“I think it’s just the idea of, ‘Oh, I’m a sewer,’ that doesn’t thrill the average young individual today,” she said. “Skills for a lot of different industries are coming back now, machinists and automotive workers and sewers. I think if you have a skill when the economy gets bad, you’re more likely to succeed than someone who doesn’t.”

Compared with the other courses Dunwoody offers — graphic design, Web programming, robotics — sewing can seem a little old school, students say. But Elizabeth Huber, 22, who took a break from the University of Minnesota to take the sewing course, said that can also be a selling point.

“I like getting back to making things, to touching and manipulating materials rather than just pushing buttons or tweeting all day,” she said.

As the sewing course drew to a close, members of the Makers Coalition were jostling for the 18 graduates. Don Boothroyd at Kellé, a firm that makes dance costumes, hoped to snag 10 of them. J. W. Hulme wanted five, and was considering covering a student’s tuition for another course exchange for a contract promising that the student would work at Hulme for one year. Airtex hoped for five to 10 students.

But only nine students completed the course — many dropped out for personal reasons, or decided they just weren’t interested in the work — and eight got jobs. The coalition is now revamping the curriculum to focus more on hands-on work and machine maintenance.

Airtex decided it could not afford to wait for the coalition’s training program to work out its kinks. So, as the course proceeded, Airtex redoubled its efforts to find people who had some background in sewing. Mr. Miller and Ms. Shields offered a bonus to existing employees who brought in friends. They hosted an open house for prospective workers, and tried to think of groups they had not approached before — like a nonprofit that works with people with disabilities.

“I had a guy driving me to the airport the other day,” Mr. Miller said, “and he mentioned he knows a lot of people in the Cambodian community and I should call his pastor.”

Finally, Airtex decided it had to pay for training itself, even if that meant the company was less profitable for a while. It trains workers for a few hours a week, with a technical-college instructor and existing employees instructing new ones on topics like ergonomics and handling tricky materials. Airtex has since made 10 new hires for floor jobs, none of whom were highly experienced.

“The reality is, if we want good workers we know we have to train them and bring them in ourselves,” Ms. Shields said.

The factory floor now seems less barren because there are 25 sewing stations (there is still room for another 25). And most significantly, the additional workers mean the company can take on new work: Airtex has tripled its capacity, and is now making about 70 percent of its products in the United States.

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BP again fighting $11 billion fine from Gulf oil spill in court

By Suzanne Goldenberg, The GuardianSunday, September 29, 2013 18:53 EDT

BP’s lawyers will fight attempts to fine the oil giant up to $18 billion (£11.1bn) over the 2010 Deepwater Horizon disaster, when a new trial opens in New Orleans on Monday.

The latest legal battle revolves around the company’s efforts to cap its runaway well, and the amount of oil that entered the Gulf of Mexico during the 87-day spill.

The trial, expected to last a month, could add up to $18 billion in financial penalties to BP’s bill for the disaster – five times the $3.5 billion originally set aside for fines. That is on top of the $42.4 billion the company has spent to date on cleanup, claims, and fines.

BP is also fighting a second battle to limit payouts to thousands of individuals and businesses in the Gulf who lost livelihoods because of the spill.

The company has already outspent the $7.8 billion it set aside for the uncapped settlement, and recently took out newspaper ads saying the system was being abused.

Monday’s outcome hinges on what the court decides about whether BP did everything it could to cap the well. The court will then turn to the dispute over how much oil escaped into the Gulf.

The trial is the second of three phases being heard by US district judge Carl Barbier.

The first phase, which wound up in April, was to apportion blame for the events leading up to the fatal blowout of the well among BP and its partners, Transocean Ltd and Halliburton Co.

The blowout killed 11 men and polluted vast swathes of ocean and beach and devastated wildlife and industry in five Gulf states.

On Monday the government, joined now by BP’s former partners on the well, will argue that the company deliberately underestimated the size of the spill, and wasted time trying to plug the well with debris, when the flow was too strong.

The argument will be critical to the final tally of BP’s legal bills.

Under the Clean Water Act, BP could be fined $1,100 for each barrel of oil that escaped into the Gulf, rising to $4,300 a barrel if the company is found to be guilty of gross negligence.

“I think BP has an uphill battle establishing that their efforts to cap the well were successful because of the sheer length of time involved,” said Blaine Lecesne, a law professor at Loyola University in New Orleans, who has been following the trial.

“We all recall those images of those futile efforts: one device after another everything from injecting debris into the well to the top hat to finally what actually worked which was this custom built device to cap the well.”

However, BP lawyers can claim the company did its best given the complexity of the event – a blownout well on the ocean floor a mile below the surface, Lecesne said.

BP in pre-trial motions argued that the federal government reviewed and approved of its various plans to cap the well at every juncture, and that other oil companies also agreed with its strategy.

The court will then spend about three weeks hearing from technical experts about how much oil ultimately escaped into the Gulf.

The federal government estimates 4.2 million barrels of oil entered the Gulf in those 87 days. BP says it was 2.45 million, and that the government used untested methods to reach its figure. “United States experts employ unproven methods that require significant assumptions and extrapolations in lieu of … available data and other evidence,” company lawyers said in a finding.

The judge is not expected to give his ruling until next year.

Even once those fines are set under the Clean Water Act, BP could still be hit with high bills for environmental restoration to the Gulf. Research published last week in the PloS scientific journal found that it could take months for the deep ocean near the well site to recover.

“There is a lot at stake,” said David Yarnold, president of the Audubon Society conservation group. “There is enough at stake here to really begin rebuilding America’s wetlands. There is enough at stake here to really offer the kind of reparations that the Gulf coast deserves.”

Silvio Berlusconi has plunged Italy into another political crisis. It's a wake-up call for Europe and a reminder that, despite what the recent German election campaign suggested, the euro crisis is by no means over yet.

When Silvio Berlusconi was still prime minister of Italy, a telephone call was recorded between him and a tv starlet whose company he liked to keep. In it, the prime minister sighed that being the Italian leader and a politician was little more than a bothersome side job and that he would much prefer to just spend his time with babes.

Since this weekend, it is likely that many across Europe are wishing Berlusconi's interest in starlets would take up all of his attention. The resignation of five ministers belonging to Berlusconi's People of Freedom (PDL) party will, after all, mean more than just the collapse of the current government in Rome. The political trick is reminder of one of the greatest uncertainties of this euro crisis: The political foolishness of member states. Berlusconi's transparent attempt to prevent his threatened expulsion from the Italian Senate -- as a result of his legally upheld conviction on tax evasion charges -- is a prime example of such political recklessness.

But this is about more than just Berlusconi. It also has to do with the failure of an entire crisis strategy. Brussels has made a serious effort to help stabilize the Italian political landscape following Berlusconi's departure. The purchase of Italian government bonds through the European Central Bank (ECB) helped to limit attacks by financial market speculators against Italy and to keep interest rates on loans to the country at a bearable level.

Frustration over Chaos in Rome Is Great

The European Commission also officially closed deficit violation proceedings against the country, although it did repeatedly warn of how serious the situation is. Noting earlier this month an uptick in Italy's borrowing costs, the European Union's commissioner for economic and monetary affairs, Olli Rehn, said, "To my mind this is a warning sign to Italy to ensure political stability and fiscal sustainability."

There is thus great frustration in Brussels over the chaos in Rome. One EU official described it as "irresponsible" and a folly. Another recalled how difficult it is to force important tax reforms through in the country and that the level of Italy's new debt has once again climbed above the limit of 3 percent of gross domestic product, a development which could lead to new EU sanctions. The International Monetary Fund (IMF) has already warned against any new holes in Italy's bank balance sheets.

More problematic, though, is that even with fresh elections, there is the threat that the standoff between Berlusconi's supporters and those of political anarchist Beppe Grillo and the Italian socialists could repeat itself. If Italy does not reform its complicated electoral law, there is the ongoing threat of political gridlock.

Italy Not the Euro Zone's Only Construction Zone

This could have devastating consequences. In the euro zone, Italy is the state equivalent of a major bank that is so important to the financial system that it must not go under -- it's too big to fail. SPIEGEL ONLINE columnist Wolfgang Münchau recently wrote about the limits of the EU rescue measures: "For a protective shield for Italy, it is not enough." In October, commissioner Rehn is set to review the Italian national budget, with financial markets already driving up interest rates for Italian government bonds.

But Brussels could really have done without the new troubles emanating from Rome; after all, Italy is hardly the only country in the euro zone resembling a building site. On the contrary, Italy is actually in a relatively good position with its competitive industry and high private wealth. Michael Hüther, head of the Cologne Institute for Economic Research, told the Tagesspiegel newspaper: "It's not perfect, but other countries concern me more."

Slovenia may soon require new aid, and Portugal too. A multibillion-euro third rescue package for Greece is as good as a done deal. New problems are on the horizon in Cyprus, perhaps even in Spain. And the latest about-face in Italy could also complicate the Herculean task of keeping France on the path to reform.

For more than a year, ECB head Mario Draghi has at least calmed the markets down with his massive purchases of government bonds. It has bought time, but has not eliminated the underlying causes of the euro crisis. Have the EU's policymakers actually made good use of the breathing space it afforded them?

No matter the make up of the new German government -- Merkel's conservatives will start talks on a possible grand coalition with the Social Democrats on Friday -- it must answer this question, and admit that the euro zone's demons are not yet defeated; they are just asleep.

In Berlin on Monday, the German government emphasized its interest in political stability in Rome. "Our hope is that the forces in Italy that are working toward a stabilization of the situation will find a solution," said government spokesman Steffen Seibert.

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SPIEGEL ONLINE09/30/2013 06:17 PM

The Hostage-Taker: Berlusconi Pushes Italy to Brink

An Analysis by Hans-Jürgen Schlamp in Rome

He's to blame for 20 years of standstill in Italy. Now he's leading the nation and the whole of Europe to the brink of disaster. If Silvio Berlusconi succeeds in toppling the government this week, his cynicism will have won.

He cries a lot these days. On Sunday, his 77th birthday, he shed tears after receiving a letter from his children assuring him of their eternal loyalty. Usually he cries about supposed disloyalty and his battle against the "red robes." Whenever Silvio Berlusconi cries, Italy must tremble.

He was in floods of tears 20 years ago. Even under the shower, as a close aide once recounted. "They're going to finish me," he whined. But the mogul always went for broke and hurled himself into the fray to rescue his legally and economically fragile business empire. And he always won.

He plunged Italy into two decades of political turmoil that turned it from a top-tier industrial nation to a crisis-ridden, over-indebted country in desperate need of reforms. Two decades of permanent election campaigning that always focused on the same subject -- for or against Berlusconi. There was never time, and never a political majority, for reforms. As a result, government debts ballooned until they became unmanageable.

Berlusconi's friends are telling Italian newspapers that the four-time prime minister is appalled at the '"politicized judges" in this "half-baked democracy" that want to "finish him off." He's having dreams about being led off in handcuffs while the people of Italy rise up and take to the streets across the country to resist his arrest.

A Convicted Criminal

Berlusconi is an economic criminal whose conviction can no longer be appealed. Italy's highest court sentenced to him to four years in jail which is likely to be commuted to house arrest due to his advanced age and diverse legal factors. He will have to give up his seat in the Senate and stay out of politics for a yet-to-be-determined period. But he doesn't want to retire, so he's going for broke again. He still has an influential TV empire, vast wealth and enough personal vigor. It's hard to believe, but up to 30 percent of Italians would vote for him now, and who knows -- that percentage could increase following an election campaign.

His plan is to topple the government, which depends on seats from his party, and to enforce an early election as soon as possible. That would enable him to avoid the looming eviction from the Senate and, if he wins the election, it would allow him to pass tailormade laws to get him out of his predicament. The current crisis is Berlusconi's only chance to save his political career.

He doesn't have unanimous backing from his party. Many are grumbling, some are openly voicing their disapproval. The question is whether enough of them will really dare to resist him in upcoming votes in parliament. His party -- founded as "Forza Italia" ("Forward Italy"), then renamed "Popolo della Liberta" ("People of Freedom") and now about to assume its old Forza name -- is no ordinary democratic political party. Decisions aren't debated or voted on; instead, Berlusconi, the founder and leader, decides everything from who becomes an MP to who gets to have a career and who becomes a minister. It's a company, in fact. There are no shared decisions. There's just one boss and that's it.

Resist Him at Your Peril

Even if Italy doesn't hold a new election, Berlusconi could still get his way -- he could use the seats of his MPs to stir up new crises each week and wear down the government until it agrees to some kind of amnesty for him. That's all he wants, after all.

He says he'd immediately agree to everything if it was "in the interests of the people," he'd step down if it were "useful for the country." But that's pure cynicism. Berlusconi has "lost all dignity," the arch-conservative newspaper Famiglia Cristiana ("Christian Family") wrote in its latest edition.

One man could put a stop to Berlusconi's game: former comedian Beppe Grillo. His Five Star Movement has more than enough seats to govern with the Social Democrats and their allies, or at least to launch urgently needed reforms ahead of a new election. Without a new electoral law, the next election will probably produce yet another stalemate. But Grillo doesn't want to. He wants a new election, he wants to govern or nothing. Grillo's voters are anti-establishment, they're fundamentally opposed to "them in Rome." He too is profiting politically from the crisis, just like Berlusconi.

Prime Minister Enrico Letta wants to present an austerity and reform program in parliament this week and to link that to a vote of confidence that will determine the near-term fate of the nation.

A vote against reform, wrote 89-year-old author, journalist and politician Eugenio Scalfari in La Repubblica, would trigger a development that would be "more than a disaster," not just for Italy but for Europe. The collapse of the Italian state, an explosion in public debt and plunging financial markets would ensue.

And Italy would, like Somalia, "be in the hands of two gangs, led by two irresponsible people."

The new law claims to protect “public order, security, health, and cultural value” and empowers local authorities to designate areas as out-of-bounds for homeless people, as well as evict people living in huts or shacks.

Offenders can be punished with community service, fines or even imprisonment.

Hungary’s treatment of the homeless has triggered criticism from rights campaigners and international bodies including the Venice Commission, an advisory body to the Council of Europe.

Earlier this month New York-based watchdog Human Rights Watch cited Hungary’s laws on homelessness as an example of Budapest’s “undermining” of EU law and human rights since Prime Minister Viktor Orban’s right-wing government came to power in 2010.

The latest law is “primarily in the interest of homeless people,” a statement from Orban’s office insisted Monday.

Instead of staying in hostels “they rather choose to stay in public areas where they risk freezing to death during the winter,” the statement read.

The government says funding for programmes and facilities helping the homeless has increased, while hostel places are adequate to cater for the homeless population — estimated at over 4,000 in Budapest alone.

Last November Hungary’s constitutional court judged an earlier clampdown on rough sleeping was unconstitutional, but in March this year parliament voted to amend the constitution to reinstate the restrictions.

Before Monday night’s vote, several hundred homeless people and activists staged a protest outside parliament.

“This is a social issue, not a criminal one,” Tessza Udvarhelyi, an activist with The City Belongs to Everyone rights group told AFP.

“Authorities should help vulnerable homeless people find dignified accommodation and work rather than punish them,” Udvarhelyi said.

“It is a lie that there are enough hostel places for all, and what does exist is often not safe, clean, or dignified,” she added.

Udvarhelyi said the group will turn to Hungary’s rights ombudsman and president in a bid to repeal the law.

Three Croatian Roma families traded women on the strength of their stealing skills and used children like conscripts to a criminal army, a French court was told Monday.

A total of 27 people aged between 19 and 55 are charged by the court in Nancy, eastern France, with offences ranging from criminal association to people trafficking in a trial taking place against the background of a highly charged debate over the treatment of Roma migrants from eastern Europe.

Gilles Weintz, the police officer who took charge of a complex probe into the families’ activities, said they were behind more than 100 robberies carried out in 2011 alone, in France and neighbouring parts of Belgium and Germany.

Most of them were allegedly carried out by children as young as 10.

“The burglaries were daily, all over Europe,” Weintz said. “They never stopped: for the children it was like a form of military service.”

Weintz said the prosecution would also present evidence of brides being bought then renounced when they did not bring in enough money.

The evidence against the families is based on the tapped phone calls of 120 suspects which the officer said had revealed a mafia-style structure in which clan chiefs were supported by a network of subordinate captains and lieutenants, who in turn ran the children at the bottom of the pyramid.

“Some of what we discovered was particularly shocking, like the father who asked his 12-year-old daughter to hide a stolen watch worth 80,000 euros in her rectum because he knew the police would not do body searches on minors.”

The people trafficking charges related to the alleged purchase of wives for up to 180,000 euros each.

“The better they were at stealing, the higher the price was,” Weintz added. “Young looking women also commanded higher prices because they had a better chance of passing themselves off as minors.”

The officer cited the case of a woman identified as Nathalie who had been bought but failed to live up to expectations by bringing in “only” 200,000 euros over two years.

“A Roma court ordered her family to pay back 100,000 euros but the amount was finally reduced to 55,000 to take into account the sexual abuse she had suffered.”

The children meanwhile were expected to bring in up to 5,000 euros per month each in the form of stolen goods that were then sold on through fences in France and Germany, helping to finance luxury lifestyles for the clan chiefs, some of whom owned upscale properties in Slavonski Brod in Croatia.

The suspected supremo of the whole operation — a 66-year-old woman — is to be tried separately from the 27 suspects on trial here.

Lawyers for the defendants contest the people trafficking charges, saying the financial transactions were part of traditional dowry arrangements.

They are expected to challenge the extent to which the prosecution case is based on evidence garnered from phone tapping.

Defence lawyers also questioned whether their clients could reasonably expect a fair trial in light of the current atmosphere of hostility towards Roma in France amid ongoing controversy over a claim by Interior Minister Manuel Valls that most of them will never assimilate into French society and should be deported.

“I hope there will not be a judicial stigmatisation as there is currently a political stigmatisation,” said Alain Behr, a lawyer for one of the alleged clan leaders.

[Image via Agence France-Presse]

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SPIEGEL ONLINE09/30/2013 05:51 PM

Roma in Berlin: 'I've Lived in a Car Since I Was Two'

By Lena Reich

Thousands of economic refugees flood into Berlin every year, including many Roma. Some end up homeless, many are insulted or spat upon. Now a new program aims to help them find jobs and apartments -- and begin a new life.

Marietta is sitting in the trunk of a car with the tailgate wide open, her wailing child in her arms. She's lived in this Renault parked in front of St. Stephen's Church in Berlin's Wedding district since April. She is 25 years old; her child just 10 days, after being born in the city's Virchow Clinic. Marietta was already pregnant when she made the journey from Romania to Germany.

She needs help. A Roma, she already had two kids, aged four and six, but cannot now breastfeed properly. Her breasts are inflamed and swollen. She could seek assistance from the local authorities, but she's afraid they would take away her baby.

Marietta's family are among the thousands of people who come to Germany from Eastern Europe, driven by the promise of a better life. People like Marietta are often called migrant workers, but the term doesn't really fit. They have actually come to Germany as economic refugees, to stay.

Around 8,000 Romanians and 14,000 Bulgarians are currently living in Berlin, of which some 1,800 and 3,000 respectively came last year alone. Most have apartments, but many end up living in cars, camping in parks or finding alternative accommodation -- with relatives or friends, or in emergency shelters. There are believed to be dozens of families in cellars and attics, especially in the Neukölln district.

Marietta knows no life other than that of poverty. "I've lived in a car since I was two years old," she says. And so, when she set off from Bucharest for Germany in April with her parents, husband and children, she had nothing to lose.

Berlin Launches Ambitious 'Action Plan'

Her husband found work with a demolition company that pays him €4 ($5.41) an hour, mostly at night. Before she gave birth, Marietta had begged for money in the city's upscale Mitte district. It was not a regular income, but the family has had more luck than most of their "colleagues," as she calls others who live in the row of cars: In a few days, they will get their own apartment.

To try and help people like Marietta and her family, the Berlin city government adopted an "Action Plan for the Integration of Foreign Roma" in July. It should improve conditions for them: Better access to education, healthcare and to the jobs market. If and how Berlin can actually afford to finance such noble goals, however, is still unclear.

As part of the plan, pregnant women will have healthcare costs, including childbirth, covered by an emergency fund if they have no money of their own. As Marietta's Romanian insurance company refused to cover the costs of her most recent birth, she paid the Virchow Clinic the €2,000 ($2,700) herself.

A small part of that she had saved up, the rest came from a man who considers himself to be the leader of the Roma group. How he came by the money is not clear. "There are also Romanians who have money. But you do not see them on the streets," this leader said. It was he who found the apartment for Marietta and her family. He speaks German and paid the €1,000 deposit. They will pay him back in installments.

These families have arrived at a time of rising rents, which have made affordable housing scarce and left shelters always full. For people like Marietta, escape from poverty only seems to lead to more poverty and no prospects.

Roma Children Suffer Discrimination

But Marietta is determined. If only because of her children, she does not want to go back to Romania. "Here, they have fewer worries." According to estimates by the United Nations Children's Fund (UNICEF), between 300,000 and 400,000 Roma children do not attend school in Romania. The ones who do frequently suffer discrimination from teachers, and, according to UNICEF, schools with a high proportion of Roma students are often poorly equipped. The 2013 Amnesty International Report also criticized the fact that Roma children were being placed in schools for the disabled.

While Marietta is not entitled to a nursery place for her two youngest children, her 6-year-old daughter was enrolled in mid-September.

Marietta's 13-year-old niece Alessandra, meanwhile, is already in the sixth grade at the neighborhood's elementary school. When she came to Berlin from Bucharest five years ago, she did not speak a word of German. But she learned the language in a program supported by her school, alongside predominantly Turkish-speaking children.

Here, too, Berlin's "Action Plan" will play a part: For the next two years, the city government wants to run additional "study groups for new arrivals without knowledge of German" in the first and second grades in schools.

Alessandra's case shows how useful this approach can be. Today, she speaks fluent German. Nevertheless, she, her sister and her parents lived in a car for two years, until 2011. Then they found a three-room apartment, but when the costs of living there rose, they could not afford it and ended up back in the car.

Alessandra now looks exhausted. Her face is swollen from the damp cold and her limbs ache. The teacher repeatedly makes fun of her living situation in front of the class. Alessandra talks of a 10-year-old who could only look on as his mother was hit in the face by a passerby. Why was she attacked? "Because she is a Romanian."

'Banish Them from the Cities'

Marietta herself speaks of local residents who always look at her angrily and who bark "German words" at her that she does not understand. Young people have spat on her.

Antiziganism is widespread. In a long-term study two years ago, more than 40 percent of respondents said that they would have a problem if Sinti and Roma were staying in their neighborhood. About a quarter of participants expressed the view that Sinti and Roma should be "banished from the inner cities."

Michael Kraft of the Southeast Europe Cultural Association complained that none of the parties from the political center made the integration of economic refugees a discussion point during the recent election campaign. The association assists refugees, Roma and migrant workers. Wherever they come across families, workers from the association try to engage them in conversation, whether on the street or in their homes. They offer social integration guidance and legal advice on initial consultations, accompany the people to the local authority office.

Occasionally, Kraft and his colleagues are met with refusal. "It can take years for families to trust us and accept our help," said one co-worker. "But we want to and need to reach these families who have often had traumatic experiences of war or being on the run. This can only work together." Kraft knows only too well of the resentment with which these people are often exposed to in Germany. "I fear that our society does not have the willingness and openness to want to deal appropriately with the issue of immigration and its various manifestations."

Soon after, Marietta is living in her new apartment. The walls are missing wallpaper, the windows are leaking. The rent is being paid by the job center. Marietta lays her sleeping baby down on the travel cot with her other two children on the couch next to it. There is not that much room here for the family of seven, who live in two rooms. Thick blankets hang in front of the windows. Marietta smiles happily. Nonetheless, the fear remains that if the building is renovated in the next year, the rent will go up and the housing benefits will no longer be sufficient to pay for it. Then the search will begin all over again.